NEGOTIATOR OFFERS TO WEAKEN ANTI-SMOKING ADS

Offers to Discuss Options for More Tobacco Company Funding

WASHINGTON (AdAge.com) -- A lead negotiator in the 1998 tobacco settlement that launched the American Legacy Foundation's anti-smoking campaign has offered to discuss the possibility of reigning in anti-smoking ad content in return for the tobacco industry's continued funding.

companies to resume paying $300 million a year into the "Truth" advertising project, Connecticut's attorney general, Richard Blumenthal, said he would be willing to "explore" restraints on edgy anti-smoking ads.

Funding wanes
While the states continue to receive billions from the settlement, four tobacco companies who settled -- R.J. Reynolds Tobacco Co., Brown and Williamson Tobacco Co., Lorillard and Philip Morris USA -- only had to fund the foundation's efforts if their market share exceeded 99.05% of cigarettes sold. Most payments ceased last year as discount brands gained market share.

Two tobacco makers today said they weren't interested in continuing to fund the ads.

"We have fulfilled our financial obligation. It was mutually agreed on and substantial," said Carol Crosslin, a spokesman for R.J. Reynolds. "We are not going to make any additional payment. The state and federal government have an unprecedented, $246 billion over a 25-year period that can be used to support education."

'Paid a lot of money'
Mark Smith, a spokesman for Brown and Williamson, said his company had "paid a lot of money already to support that group and its youth prevention work." He suggested the foundation should seek funds from the companies that had recently grown their market share.

Tobacco makers have repeatedly complained that instead of targeting smoking, some of the foundation's ads are being used to disparage tobacco executives. The Master Settlement Agreement that created the foundation banned the "vilification" of tobacco companies in advertising.

The foundation's Super Bowl commercial this year, from Arnold Worldwide of Boston and Crispin Porter & Bogusky of Miami, was a fake ad for "Shard O'Glass" ice pops, which the manufacturer admits are dangerous but still makes by the millions. The ad is a parody of Philip Morris' "disclosure" spots, which acknowledge the dangers of tobacco.

The foundation has vigorously denied violating the agreement and said the ads were successful in preventing underage smoking.

'Big cookie jars'
Vermont's attorney general, Bill Sorrell, who heads the tobacco committee of the National Association of Attorneys General, conceded that states had used the settlement "like big cookie jars," rather than spending some of the money on their own anti-smoking ads. Nonetheless, he said tobacco makers should continue funding the ads.

Mr. Blumenthal said attorneys general never expected the foundation money to evaporate so fast and that they actually had been assured that the money would continue. "What they are trying to do now is violating an implicit trust," he said.